Rent vs. Buy Calculator

This calculator can help you to compare the costs of renting to the costs of buying a home. Because there are other factors to consider, (interest, property taxes, tax savings, appreciation, opportunity costs, closing costs, selling costs, etc.) it is complicated to compare the cost of renting to the cost of buying. This calculator attempts to take all of these factors into consideration in order for you to make an informed decision.

Help Buttons: For further explanation of any of the entry fields, click on the question mark to the left.

? Expected Annual Inflation Rate (%): Enter the annual inflation rate. Enter 4% as 4. This is used to inflate the costs of rent, insurance, maintenance, dues and property taxes for the length of time you will own the home.

? Purchase Price of Home: Enter the total purchase price of the home, not including closing costs.$

? Down Payment Amount: Enter the amount you will have available to put down on the house after you have set aside the cash you will need to pay the closing costs.$

? Length of Mortgage Term (Years): Enter the number of years you are financing the home for.

? Discount Points on Purchase of Home (%): Discount points are paid up front in order to reduce the interest rate of your mortgage. Each point represents 1% of your mortgage balance. Enter 1% as simply 1 (do not include percent sign).

? Origination Fees (%): The percentage (often as high as 1% of the loan amount) that a lending institution charges for processing and originating a loan.

? Other Loan Costs: The total of other loan related costs, such as filing fees, appraiser fees, etc.$

? Mortgage Insurance (PMI %): If your downpayment is less than 20% of the value of the home you are buying, you may be required to pay mortgage insurance of somewhere between 0.2% and 0.5% of your principal balance each month. Enter 0.4% simply as 0.4 (do not include percent sign).

? Interest Rate You Expect to Earn on Savings (%): Enter the annual interest rate you expect to earn on the down payment and closing costs you will invest if you decide to rent instead of buy. Enter 7% simply as 7 (do not include percent sign).

? Expected Home Appreciation Each Year (%): Enter the percentage amount you expect your house to appreciate by each year. Enter 3% simply as 3 (do not include percent sign).

? Number of Years you will Stay at this Property: Enter the number of years you expect to rent or own the property you are considering. Typically, if you plan to move out of a home in less than 5 years from the date of purchase, you may be better off renting.

? Real Estate Agent Commission Rate (%): Enter the percentage of your home's selling price that you expect to pay a real estate agent or broker when it's time to sell your home. Enter 7% simply as 7 (do not include percent sign).